MEPs approved on Wednesday April 24 the coordinated withdrawal of the European Union (EU) from the international energy charter treaty, considered too protective for investments in fossil fuels and that around ten member states, including France, have already announced that they want to leave.
Following validation by the Twenty-Seven at the beginning of March, the European Parliament meeting in plenary session in Strasbourg in turn gave the green light, by 560 votes (43 against, 23 abstentions). A final formal confirmation by the States will now be necessary. Those who wish, however, will remain free to approve the “modernization” of the treaty currently under discussion and remain members, which was demanded in particular by Hungary, Slovakia, Malta and Cyprus.
The European Commission proposed in July that the EU and its member states “withdraw in a coordinated and orderly manner” from a treaty deemed “incompatible with European climate ambitions”.
“A collective signal”
The Energy Charter Treaty (ECT) was signed in 1994, at the end of the Cold War, to provide guarantees to investors in the countries of Eastern Europe and the former USSR. Bringing together the EU and around fifty countries, it allows companies to claim, before a private arbitration court, compensation from a State whose decisions and regulations affect the profitability of their investments. And this even if it is a pro-climate policy: Italy was ordered in 2022 to pay compensation of around 200 million euros to the oil company Rockhopper for having refused an offshore drilling permit.
Faced with the proliferation of disputes, the Europeans first attempted to modernize the text to prevent opportunistic claims and gradually exclude fossils. But due to a lack of rapid compromise, around ten EU states decided, at the end of 2022, to withdraw from the treaty (France, Spain, Netherlands, Germany, Luxembourg, Poland, etc.). Italy left it in 2015. Outside the EU, the United Kingdom announced its withdrawal on February 22.
The text adopted on Wednesday April 24 “is a collective signal, a real political weight which strengthens our climate roadmap,” declared Renew MEP (Liberals) Christophe Grudler, rapporteur of the text.
Certainly, all countries remain affected by the “survival clause” of the ECT, which still protects fossil investments for 20 years after a signatory country withdraws. But the move could help deter prosecutions within the EU, Grudler believes.
